With the ever-changing threat landscape, more businesses are turning to cyber liability insurance to manage their risks. Before opting for such insurance policies, it’s essential to understand their requirements and coverage.
Cyber liability insurance allows businesses to share the risk of doing business with others and helps to reduce residual risk and potential losses.
These policies typically cover losses caused by:
- Non-criminal incidents: staff errors, mishandling of records, improper information disclosure
- Cybercrime: malware, hacking, phishing, DDoS (distributed denial of service) attacks, business email compromise, extortion, ransomware, banking fraud
- Protections for data restoration, intellectual property loss, regulatory defense expenses, fines, and penalties.
Cyber risk strategies
Organizations have various options to minimize residual cyber risk associated with business activities:
- Avoiding risk altogether by an alternate way of doing business that eliminates the risk
- Assigning as much risk as permitted by law to a service provider by outsourcing the activity (although this may bring in new risks)
- Reducing the risk by deploying countermeasures and security controls that can mitigate exposure
- Purchasing cyber liability insurance to transfer particular risks to an insurance carrier
- Accepting the residual risk and planning to tolerate potential losses.
Cyber insurance carriers assume you have an existing security program
Cyber liability insurance is like property insurance in that insurance carriers ask for information about the countermeasures that a business has put in place before insuring against losses. For example, property insurance carriers may want to know about fire extinguishers and security guards before insuring against theft and fire.
Similarly, cyber liability insurance carriers will ask about a business’s approach to identity management, access control, data classification/encryption/backup, email security, security awareness training, vulnerability management, network and endpoint security, network visibility, incident response, compliance frameworks, industry standards, and procurement.
Cyber insurance requirements guide
When applying for cyber liability insurance, insurance carriers may require different levels of information. The questionnaires will assess your organization’s security program by asking about your policies, procedures, technical capabilities and limitations, and specific security technologies.
To help organizations get started, Access Tech can review requirements and help fill the IT gaps to make cyber insurance more accessible. Businesses can secure the best and most cost-effective insurance policy for their operations by ensuring they have the appropriate cybersecurity solutions in place. Access Tech can help with that. Contact us today!